Question & Answer

What is hardness, and how is it generally tested?

Briefly describe the convergence efforts related to financial statement presentation.

Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will receive one share of Badger stock for every 10 shares of stock they already own. Madison owns 1,000 shares of Badger stock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of this year.

What is the difference between the income and substitution effects?  For which types of taxpayers is the income effect more likely descriptive?  For which types of taxpayers is the substitution effect more likely descriptive?

Included in the December 31 trial balance of Rivera Company are the following assets. Cash $ 190,000 Work in process $200,000 Equipment (net) 1,100,000 Accounts receivable (net) 400,000 Prepaid insurance 41,000 Patents 110,000 Raw materials 335,000 Finished goods 170,000 Prepare the current assets section of the December 31 balance sheet.

Differentiate between a fixed-rate mortgage and a variablerate mortgage.

Explain why some public firms decided to go private in response to the passage of the Sarbanes-Oxley (SOX) Act. (LO6)

The cash method of accounting means that taxpayers don’t recognize income unless they receive cash or cash equivalents. True or false? Explain.

Why might some have trouble classifying costs as fixed or variable?

On January 1, 2014, Doug Nelson Co. leased a building to Patrick Wise Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. 2. The leased building cost $4,500,000 and was purchased for cash on January 1, 2014. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $275,000 per year and are made at the end of the year. 5. Property tax expense of $85,000 and insurance expense of $10,000 on the building were incurred by Nelson in the first year. Payment on these two items was made at the end of the year. 6. Both the lessor and the lessee are on a calendar-year basis. Instructions (a) Prepare the journal entries that Nelson Co. should make in 2014. (b) Prepare the journal entries that Wise Inc. should make in 2014. (c) If Nelson paid $30,000 to a real estate broker on January 1, 2014, as a fee for finding the lessee, how much should be reported as an expense for this item in 2014 by Nelson Co.?

Assume that Denis Savard Inc. has the following accounts at the end of the current year. 1. Common Stock. 2. Discount on Bonds Payable. 3. Treasury Stock (at cost). 4. Notes Payable (short-term). 5. Raw Materials. 6. Preferred Stock Investments (long-term). 7. Unearned Rent Revenue. 8. Work in Process. 9. Copyrights. 10. Buildings. 11. Notes Receivable (short-term). 12. Cash. 13. Salaries and Wages Payable. 14. Accumulated Depreciation—Buildings. 15. Restricted Cash for Plant Expansion. 16. Land Held for Future Plant Site. 17. Allowance for Doubtful Accounts. 18. Retained Earnings. 19. Paid-in Capital in Excess of Par—Common Stock. 20. Unearned Subscriptions Revenue. 21. Receivables—Officers (due in one year). 22. Inventory (finished goods). 23. Accounts Receivable. 24. Bonds Payable (due in 4 years). 25. Noncontrolling Interest. nstructions Prepare a classified balance sheet in good form. (No monetary amounts are necessary.)

Explain how pro-cyclical lending criteria applied by financial institutions could amplify fluctuations in real GDP.

Assume that in addition to renting the condo for 100 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $30,000 of gross rental receipts, her itemized deductions exceed the standard deduction before considering expenses associated with the condo, and that her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to rental use of the home.

Laura Li, a U.S. resident, works for three months this summer in China.  What type of tax authority may be especially useful in determining the tax consequences of her foreign income?

What price should be used when there is such a distortion?

Lexington Corporation’s weekly payroll of $24,000 included FICA taxes withheld of $1,836, federal taxes withheld of $2,990, state taxes withheld of $920, and insurance premiums withheld of $250. Prepare the journal entry to record Lexington’s payroll.

What is self-assembly in nanofabrication?

Janelle and Lori were divorced in 2016.  Pursuant to the divorce decree, Janelle receives $10,000 of alimony each month.  Use an available tax service to determine if the alimony Janelle receives is taxable. Would your answer change if Janelle and Lori still live together?

Risk classification framework Harley–Davidson, Inc. has found itself having to confront a number of risk-related issues. These have mainly related to: (a) the need to increase the number of recalls due to faults (b) surging costs of making the repairs to faulty motorbikes (c) increasing pressure on market share.   Required Classify each of the three events above according to the risk classification framework (strategic, operational, legal and regulatory, and financial). (LO6)

Question: Explain the treasury-stock method as it applies to options and warrants in computing dilutive earnings per share data.

Compare and contrast the aggregate and entity approaches for a sale of a partnership interest.

Why is the orthogonal cutting model useful in the analysis of metal machining?

What are some of the principal applications of cemented carbides, such as WC-Co?

If the federal government planned to expand the space program, how might this change affect interest rates? (LO1)

Boilermaker Inc. reported taxable income of $500,000 this year and paid federal income taxes of $105,000. Not included in the company’s computation of taxable income is tax-exempt income of $20,000, disallowed meals and entertainment expenses of $30,000, and disallowed expenses related to the tax-exempt income of $1,000.  Boilermaker deducted depreciation of $100,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $60,000.  Compute Boilermaker’s current E&P.